And just like that, Palm's baby was abandoned. Among the "other announcements" in today's press release about the potential spinoff of its entire Personal Systems group (PCs, mobile devices, storage) is a note that the webOS ecosystem HP snagged for $1.2 billion a year ago is already being ditched.
"In addition, HP reported that it plans to announce that it will discontinue operations for webOS devices, specifically the TouchPad and webOS phones. HP will continue to explore options to optimize the value of webOS software going forward."
Among slightly lowered estimates for its 2011 revenue, HP confirms it's in talks with Autonomy Corporation plc about a "possible offer" for the company. It's clear that a separation of HP the services / software company and HP the hardware manufacturer leaves no room in the lifeboat for the Pre and TouchPad family, but what happens next? We're sure there will be more pointed questions about what "optimizing the value of webOS software going forward" means -- we vote for a quickie sale to one of Google's disgruntled hardware partners or better yet, opening it up for some community hackery -- on the conference call scheduled for 5 p.m. Eastern.
Update: HP CEO Leo Apotheker confirmed on the company's earnings call late this afternoon that the Autonomy acquisition is considerably further along than just a "possible offer," and that it's expected to be completed by the end of 2011. He also made it clear that any possible spin-off of the PC business won't happen soon, and said that the company will take 12 to 18 months to consider its options, further adding that he is "taking ownership" of all of these decisions. As for webOS, Apotheker expectedly offered few specifics, but suggested that just about all options, including licensing, remain on the table.
4.28.10 - HP buys Palm
2.9.11 - RIP, Palm: 1992 - 2011
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August 18, 2011 03:02 PM Eastern Daylight Time
HP Confirms Discussions with Autonomy Corporation plc Regarding Possible Business Combination; Makes Other Announcements
PALO ALTO, Calif.--(BUSINESS WIRE)--HP (NYSE: HPQ) today commented on the recent announcement by Autonomy Corporation plc (LSE: AU.L). HP confirms that it is in discussions with Autonomy regarding a possible offer for the company.
HP also reported that it plans to announce that its board of directors has authorized the exploration of strategic alternatives for its Personal Systems Group (PSG). HP will consider a broad range of options that may include, among others, a full or partial separation of PSG from HP through a spin-off or other transaction.
In addition, HP reported that it plans to announce that it will discontinue operations for webOS devices, specifically the TouchPad and webOS phones. HP will continue to explore options to optimize the value of webOS software going forward.
HP today announced preliminary results for the third fiscal quarter 2011, with revenue of $31.2 billion compared with $30.7 billion one year ago.
In the third quarter, preliminary GAAP diluted earnings per share (EPS) was $0.93 and non-GAAP diluted EPS was $1.10, compared with third quarter fiscal 2010 GAAP diluted EPS of $0.75 and non-GAAP diluted EPS of $1.08. Non-GAAP diluted EPS estimates exclude after-tax costs related primarily to the amortization of purchased intangible assets of approximately $0.17 per share and $0.33 per share in the third quarter of fiscal 2011 and fiscal 2010, respectively.
For the fourth fiscal quarter of 2011, HP estimates revenue of approximately $32.1 billion to $32.5 billion, GAAP diluted EPS in the range of $0.44 to $0.55, and non-GAAP diluted EPS in the range of $1.12 to $1.16. Non-GAAP diluted EPS guidance excludes after-tax costs of approximately $0.61 to $0.68 per share, related primarily to restructuring and shutdown costs associated with webOS devices, the amortization and impairment of purchased intangibles, restructuring charges and acquisition-related charges.
HP estimates full-year FY11 revenue will be approximately $127.2 billion to $127.6 billion, down from its previous estimate of $129 billion to $130 billion. FY11 GAAP diluted EPS is expected to be in the range of $3.59 to $3.70, down from its previous estimate of at least $4.27, and FY11 non-GAAP diluted EPS is expected to be in the range of $4.82 to $4.86, down from its previous estimate of at least $5.00. FY11 non-GAAP diluted EPS estimates exclude after-tax costs of approximately $1.16 to 1.23 per share, related primarily to restructuring and shutdown costs associated with webOS devices, the amortization and impairment of purchased intangibles, restructuring charges and acquisition-related charges.
HP will host a conference call with the financial community today at 2 p.m. PT / 5 p.m. ET to discuss these announcements well as HP's third quarter 2011 financial results. The call is accessible via an audio webcast at www.hp.com/investor/2011q3webcast.
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To supplement HP's consolidated condensed financial statements presented on a GAAP basis, HP provides non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings, non-GAAP diluted earnings per share and gross cash. HP also provides forecasts of non-GAAP diluted earnings per share. A reconciliation of the adjustments to GAAP results for this quarter and prior periods is included in the tables below. In addition, an explanation of the ways in which HP management uses these non-GAAP measures to evaluate its business, the substance behind HP management's decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which HP management compensates for those limitations, and the substantive reasons why HP management believes that these non-GAAP measures provide useful information to investors is included under "Use of Non-GAAP Financial Measures" after the tables below. This additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for operating profit, operating margin, net earnings, diluted earnings per share, or cash and cash equivalents prepared in accordance with GAAP.
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